How To Bid Commercial Construction Jobs — Transcript

Full transcript

1. 0:00How to bid commercial construction jobs.  In this video, I'm going to talk to you
2. 0:05about the process for the general  contractor to bid for the project,
3. 0:09and it will also apply to subcontractors bidding  to be awarded the actual trade specific scope
4. 0:15for the general contractor. So when we  look at commercial construction projects,
5. 0:20we're fascinated by the bridges, the laboratories,  the hospitals, but what goes behind goes on
6. 0:25behind the scenes in the bidding process.  We're going to talk about that right now.
7. 0:36Okay, so when we talk about bidding a commercial  construction project, there's two general ways
8. 0:42to go about this. First of all, it's the general  contractor bidding to be awarded the project from
9. 0:47the building owner, and then the subcontractor  to the general contractor. Let me give you a
10. 0:52high level overview of both. First of all, if you  are bidding a commercial construction project and
11. 0:58you are doing it with your team, you are going  to learn all about it, because it is an intense
12. 1:03process. First of all, you'll have your RFP or  RFQ. It's the request for proposal or request
13. 1:11for qualifications, right? It may be heavier on  the price side or the qualification side. There's
14. 1:16lots of different formats, but typically it's  broken down into the written proposal and the
15. 1:22actual interview. I love both. Written proposal  process, you're going to gather with the team,
16. 1:28have a team lead, really shape a single  message, and then delegate to the other
17. 1:33proposal participants. I'll call them before we  get to the interview team, and they are going to
18. 1:39help put together a written proposal as subject  matter experts that really answer the questions
19. 1:45and make sure that you are communicating  the aspects of price and qualifications and
20. 1:52approach to the building owner so that you can be  selected, and then go on to the interview. It's an
21. 1:57absolutely amazing process. And what I would say  is you have to shape a compelling message. You
22. 2:03have to follow the hero's journey. There's lots of  really good books about that. You have to be very,
23. 2:08very clear and interesting to keep their interest  throughout reading the proposal. And you have to
24. 2:15start planning and solving problems for their  project. Now let's go into the interview. This
25. 2:20is crazy cool. Everything you say needs to be  turned into sound bites. You need to have amazing
26. 2:26visuals, and you need to know what you're talking  about and talk to their needs. So you will go
27. 2:33through an interview preparation process and then  get into the interview and again, start showing
28. 2:38them how you're going to solve their problems and  take care of their needs, but you're going to do
29. 2:43it with love for the selection committee, with  high energy, hopefully at the right time of day,
30. 2:49and you're going to do it without the fear and  without the nervousness and really go in there
31. 2:53and win that interview. Now, when we're pricing  this, I'm going to go through the exact steps
32. 2:58there, but it's basically the same when you're a  subcontractor or when you're a general contractor,
33. 3:04the steps that you will follow for pricing. But  let me talk real quick about subcontractors. You
34. 3:09are either going to be bidding the project based  on an instruction to bidders and a bid package,
35. 3:15or you might have to interview as well. The key  thing the general contractor is looking for in
36. 3:21this interview is to make sure that you have the  right team, the right approach, the right price,
37. 3:25the right schedule. And the biggest thing that  we worry about with trade partners is that you
38. 3:30actually can deliver on your promises. And we  want to really make sure that you are the right
39. 3:36fit for this process, so whether you're a GC or a  subcontractor. Now let me go through the specific
40. 3:42steps you'll follow when you're bidding at either  level. So number one, understand the project
41. 3:48requirements. What is it that you're building?  This is not just crack open the plans or know what
42. 3:53type of building it is. We at Elevate and lean  tax and lean bill. We really go on a deep dive on
43. 3:59this. We attempt to understand the building, all  of the numbers that quantify what goes into that
44. 4:04building, we will do a page flip look at different  one off areas. Are there any overhangs? Are there
45. 4:10any high bay ceilings? Are there any special types  of form work? Is this a postage stamp site like
46. 4:15we're going to get a really good feel for what  this building actually is before we go into the
47. 4:20bidding process. Number two, and I love this,  go do a site visit and assess what's going on
48. 4:27on the actual project site. And you know what's  even cool, actually, let me say this the right
49. 4:31way. Even cooler than just going to the site is  going out there and calling in a blue stake ahead
50. 4:37of time. And then this sounds silly. You'll at  least want to do this once you've won the job,
51. 4:42but one of the cool things that you can do  is do some preliminary layout and find out
52. 4:46how that building is going to sit on the actual  lot. You definitely have to do that once you've
53. 4:51been awarded the project. I would actually lay  out the entire structure and see how it overlays
54. 4:55with the utilities, but you definitely want to at  least get a feel for the site. And here's. I want
55. 5:00you to look for look at soils, conditions,  neighbors, access, and I want you to see if
56. 5:05any utilities need to be relocated. Do you need  shoring these are all things that you can loop
57. 5:10into your written proposal and your interview to  start solving problems right away. Number three,
58. 5:16you're going to want to start estimating costs.  Obviously you're going to want material costs,
59. 5:20labor costs, equipment costs. You'll break  it out as your general conditions, which is
60. 5:24basically your insurance, bonds and your staff,  your general requirements, which is anything
61. 5:29that you have to use to build the project from a  general requirement standpoint, anything that is
62. 5:35needed for logistical support. Then you'll have  your subcontracts, your contingency and your fee.
63. 5:41And you know, there's other categories in that  budget, but you're going to start estimating
64. 5:45those and make sure that you have accurate  quantities, that you're getting trade numbers,
65. 5:49or if you are the trade that you're providing  your own number, and if you're the GC, that
66. 5:53you're doing your internal control estimates, and  that you're comparing those to make sure that you
67. 5:59have multiple sets of eyes on these numbers and  that you have accurate bid numbers. Number four,
68. 6:03you're going to propose on a timeline, obviously,  when it comes to a cost and schedule standpoint,
69. 6:08that's whether you're the GC or you're the trade  partner. And you will definitely want to break out
70. 6:13your estimate into different categories so you can  see the clear picture of what you're proposing.
71. 6:18And you want to create a timeline, and in my  case, an overall macro level tax plan to show
72. 6:24the schedule portion of this project. And I would  also include your zone maps, your logistics plans,
73. 6:29so that you know what has fed into your general  requirements inside your budget number five,
74. 6:35submit your bid. Now, I do want you to know that  there isn't just a one size fits all with this as
75. 6:40a GC, you're either going to submit your initial  proposal from a cost standpoint, in the written
76. 6:47proposal and in your interview, or you're going  to be selected on qualifications, and then you're
77. 6:52going to enter into a CM at risk type environment  where you're going to reach A guaranteed maximum
78. 7:00price, where you eventually submit your GMP,  and that total price, right? That aggregates the
79. 7:07overall budget, and that is what you are at risk  for to build the project, is the GC once you are
80. 7:13selected. Now, if you're the trade partner, people  do this differently. By the way, you can reach a
81. 7:18GMP early or late in the design process, same  with a trade partner. You might be bidding the
82. 7:24design development documents 50% CDs or 100% CDs,  and you might literally only give plug numbers or
83. 7:32square foot pricing, or unit pricing up into the  100% CDs, or whenever the GC is going to bid it
84. 7:38out and then fully bid it. Or you might have to do  a more intense process throughout but either way,
85. 7:44strategize. The key to this is literally just  sketching this out on paper as the GC or the trade
86. 7:50partner, and know the strategy for how you're  going to bid out, know the strategy for how
87. 7:54you're going to bid it out in a way that gets you  the best number, that allows you to release work
88. 7:59early enough, but doesn't waste the time of the  trade partners. And then obviously you have six
89. 8:04your post bid follow up, where you find out if you  won the project as the GC, or you won the project
90. 8:10as the trade partner, as the subcontractor. And  then you know, if you didn't, obviously get your
91. 8:14lessons learned and approved from there. But  if you did, obviously it, we are off to the
92. 8:19races. Get the feedback, but start immediately to  prepare anything that deals with your scope, your
93. 8:25contract, long lead procurement, and preparing to  start strong on that project site. And remember,
94. 8:31it's all about scope. Scope, scope. We do not want  scope gaps in any of these processes. And so I'd
95. 8:37like to close up, by the way, if you've liked this  video, please like and subscribe. Let me give you
96. 8:41some tips along the way. Number one, get accurate  subcontractor scopes and do control estimates
97. 8:48with quantities that will allow you to compare the  pricing and make sure that it is accurate. Number
98. 8:55two, be realistic with time frames. It takes some  time to put these bid packages together. It takes
99. 9:00time when you're bidding out trades. It takes time  for them to send you their number in response. It
100. 9:05takes time to create the written proposal and  do the interview. This takes time, so make sure
101. 9:10you're being realistic with it throughout number  three, always make sure you have buffers. You
102. 9:15have contingencies built in. You'll need buyout  contingency, you'll need contractor contingency,
103. 9:20you'll need owner contingency make sure you have  enough buffers to where you don't get yourself in
104. 9:25trouble. And really you're going to want to stand  out if you're going to want to win this, either as
105. 9:29the GC to the owner or as the trade to the general  contractor, you must stand out by adding value,
106. 9:35by making sure that you're preventing anything  that would keep the selection kit committee up
107. 9:40at night and start planning their project from day  one, and just remember, this can be an excellent,
108. 9:46precise and fun process if you know the strategy  and you're working as a team and you know your
109. 9:52numbers. And so here's what I'm going to do. I'm  going to put in the description below. This is a
110. 9:57blog post, but also offer that if you ever want.  Any help, reach out to us. We have templates.
111. 10:02We do this all the time, and remember, we're  wanting to find the best value, not the lowest
112. 10:09bid. Lowest bid is never lowest overall total  cost. Make sure we're doing this with high levels
113. 10:15of communication, with high levels of double  checks, with accurate numbers and with buffers,
114. 10:20and this should be an amazing process for you.  I hope you've enjoyed this video. On we go.